View from Seed

SEPTEMBER 4, 2018

Amidst the rise of new funds, new technologies, and potentially disruptive late stage players, I thought it was important to share what we consider to be our core operating principles here at NextView. . As seed funds have raised larger and larger funds, more have developed the muscle around issuing term sheets and “leading”.

North America 120

North America Seed Stage Early Stage Lead Investor 120

Hunter Walker

JANUARY 5, 2014

We’re also being more specific about what our term sheet would look like from a size and valuation perspective, potentially even proactively generating something to show the entrepreneur we’re serious. Oh, your top priority right now is a marketing hire? 4) Fund Operations. 5% Fund Operations.

Software Review 102

Software Review Balance Sheet Cofounder Technical Review 102

YoungUpstarts

OCTOBER 28, 2015

Investors typically negotiate from a term sheet, which if not handled properly can create problems that can hurt or kill the startup’s chances when they do their Series A round of funding. Law firms that focus on emerging technology companies understand their legal issues from multiple perspectives and offer excellent advice.

Convertible Security 100

Convertible Security IP Technical Review Software Review 100

David Teten

AUGUST 19, 2019

We’re currently evaluating about 20 companies a month and issuing term sheets to 25% of them; those that fit our investment criteria. The average monthly operating expenses is $70,335. The mode purpose for funding is (in order of frequency) Sales, Marketing, Market Expansion, Product Development, and Hiring Employees.

Revenue 60

Revenue Technical Review Software Review Equity 60

David Teten

SEPTEMBER 6, 2015

There is a possibility that Amex may explore acquisitions within the Amex Ventures portfolio, but those discussions will be on market terms similar to those with other potential acquirers.”. Teten: How is the corporate VC model evolving: in how they interact with portfolio companies or the operating side of their organization?

Venture Capital 60

Venture Capital Balance Sheet Technical Review Portfolio 60

Steve Blank

APRIL 1, 2020

If you were raising money, validate whether your investors are still on board – with the same terms – or at all. Operating Numbers. Some VC’s are walking away from signed term sheets. Days 3 and 4: Prepare new business model and operating plan. Internal Assessment. Sales pipeline/forecast.

South Korea 334

South Korea Salary Business Model China 334

Both Sides of the Table

APRIL 25, 2013

We had them a term sheet the same week. Tells me she wants to do operational stuff so she joins a small team of people running City Search. She learns how to ship product, how to deal with merchants, how to hire product managers. Turns out Punky was a childhood hero for Tasha. That’s cute. That happens, right?

Haiti 398

Haiti San Francisco Startup Turkey 398

Rob Go

SEPTEMBER 4, 2018

Amidst the rise of new funds, new technologies, and potentially disruptive late stage players, I thought it was important to share what we consider to be our core operating principles here at NextView. . As seed funds have raised larger and larger funds, more have developed the muscle around issuing term sheets and “leading”.

North America 36

North America Seed Stage Early Stage Lead Investor 36

Both Sides of the Table

JANUARY 21, 2010

I know he’s smart but you wouldn’t hire a Javascript developer to do your database design – would you? I always try operate on the “Fixed Fee +&# arrangement. He was the first guy that I saw demystify the legal terms in his term sheet series. Here’s a hack for you. And Brad Feld.

Southern California 318

Southern California Silicon Valley IP Stock Options 318

Sophia Perl of Wisdom

NOVEMBER 9, 2010

Use the 10-5-3-1 formula for raising money: Have 10 great meetings with investors, 5 of those do detailed due diligience on your company, get 3 term sheets, and 1 transfer into your bank account! What key hires do you need? Find people to help you through the raising money process. Always ask investors why they say no.

CTO Hire 49

CTO Hire Cofounder Fractional CTO San Francisco 49

Steve Blank

APRIL 9, 2009

But what I wanted was an agile marketing team capable of operating independently without day-to-day direction. We hired union laborers to do that. I hired a Director of Product Marketing who in his last company had ran its marketing and then went out into the field and became its national sales director.

Silicon Valley 269

Silicon Valley Technical Review RSS PR 269

This is going to be BIG.

MAY 26, 2022

They’ll obviously see the value of what you built and will be compelled to offer a term sheet on the spot. If you raised the same sized seed round as everyone else, you can only hire so many salespeople, put so much into marketing, and those resources can only grab so many customers in an efficient market for people’s time.

Founder 104

Founder .Net Term Sheet Aggregator 104

Sophia Perl of Wisdom

NOVEMBER 9, 2010

Use the 10-5-3-1 formula for raising money: Have 10 great meetings with investors, 5 of those do detailed due diligience on your company, get 3 term sheets, and 1 transfer into your bank account! What key hires do you need? Find people to help you through the raising money process. Always ask investors why they say no.

CTO Hire 40

CTO Hire Cofounder Fractional CTO San Francisco 40

Both Sides of the Table

NOVEMBER 18, 2012

So at any given point you are likely operating with a maximum of 9 month’s cash. Sign up customers who are paying you money for a service you can’t 100% guarantee is going to be operational for the full period that they’re expecting. You hire them, you own them now. Hire fast, fire faster. Center seat.

Monaco 420

Monaco Cofounder Chicago Mexico 420

Both Sides of the Table

FEBRUARY 11, 2012

submitting term sheets. In booming markets the best firms operate on a 33% basis. I have never signed a contract on these terms. So if you hire a senior sales rep with 100% bonus on top of their $150,000 base salary they want to get paid $100,000 (33% of $300,000). doing pre-emptive follow-on rounds. and so on.

Mexico 305

Mexico Term Sheet Hiring Search 305

This is going to be BIG.

APRIL 16, 2018

it strikes me that actually talking to an investor, sharing your vision, and actually starting to work together feels like a better strategy than going silent until "Pitch Day" when you show up all ready and prepared, expecting term sheets in just a couple of weeks. Get them to do some homework for you, too--especially around hiring.

Due Diligence 93

Due Diligence Early Stage Term Sheet Vesting 93

Up and Running

DECEMBER 30, 2015

I made the rookie mistake of not hiring an attorney when raising our first round. Founders should pay attention to the liquidation preference in the term sheet to ensure it does not become detrimental to them in a less than favorable exit. Not having legal counsel. Investors are very good at their job: maximizing their return.

Due Diligence 84

Due Diligence Valuation Liquidation Preference Redemption 84

Gust

OCTOBER 2, 2014

So at any given point you are likely operating with a maximum of 9 month’s cash. Sign up customers who are paying you money for a service you can’t 100% guarantee is going to be operational for the full period that they’re expecting. But why don’t you just give me the damn term sheet you promised so I can trust you even more.

Monaco 122

Monaco Cofounder Chicago Mexico 122

Both Sides of the Table

MAY 25, 2013

I’ll admit that I do know one VC firm who’s strategy is not to call their entrepreneurs and not to be involved in operations. It led to hiring Eric Schmidt. Many entrepreneurs come by with great pitches and say, “I’m hoping to have term sheets in the next 30 days.” And Coach Campbell.

LP 374

LP Later Stage IRR Term Sheet 374

Hunter Walker

APRIL 27, 2014

Last week we held our first annual LP meeting, when venture funds get their investors together with updates on operations and results. We’ve continued to refine our process so we make best use of entrepreneur’s time and move as fast – or faster – than the market in getting a term sheet to the teams we want to back.

LP 96

LP Cofounder Term Sheet Valuation 96

David Teten

SEPTEMBER 2, 2017

Bloomberg Beta open-sources their entire operating manual on Github, where their website lives. If you are one of six in the LP relationship area, you will have less leverage than if you are a new hire with the only European LP relationships. An additional 27% of funds require consensus (20%) or unanimous vote less one (7%).

Private Equity 60

Private Equity Venture Capital Equity Partner 60

Cracking the Code

JULY 5, 2016

One of their secret: acqui- hiring. If you wonder how to pick your next launch country first, see my earlier post here. ** One of the most important decisions any company of any size will make is how it will successfully launch operations in a new country (the following applies to launching in new cities or states within an existing country).

Italy 59

Italy Technical Review Germany Poland 59

Spencer Fry

DECEMBER 7, 2011

One day you're on the top of the world — you've hired the person you dreamed about, you received your first term sheet, you pocketed your first revenue, etc. — You can be the most seasoned operator, but at the end of the day you need another shoulder to lean on. You NEED a Co-Founder to Offload Stress. I was wrong.

Cofounder 78

Cofounder Startup Term Sheet IPO 78

www.paulgraham.com

APRIL 28, 2010

Most startups operate close to themargin of failure, and the distraction of having to deal with clientscould be enough to put you over the edge. And we think its better if startups operate out of their ownpremises, however crappy, than the offices of their investors.

Technical Review 76

Technical Review Startup Software Review Angel Investor 76

Reid Hoffman

JULY 27, 2021

If they don’t have the right skills or resources, they’ll pick them up along the way by hiring someone, partnering with someone, or just learning it themselves. It’s not like after completing the class I was prepared to negotiate a term sheet. Or maybe valuation depends on growth rates or operating margins.

Silicon Valley 69

Silicon Valley Venture Capital Balance Sheet Cofounder 69

Reid Hoffman

JULY 27, 2021

If they don’t have the right skills or resources, they’ll pick them up along the way by hiring someone, partnering with someone, or just learning it themselves. It’s not like after completing the class I was prepared to negotiate a term sheet. Or maybe valuation depends on growth rates or operating margins.

Silicon Valley 69

Silicon Valley Venture Capital Balance Sheet Cofounder 69

reidhoffman.org

NOVEMBER 12, 2013

For example, the network enables job seekers to get introductions to people in the group they’re being hired into, or to people who could talk to that hiring group, or to the hiring manager themself. Improving the quality of hires or increasing the speed of the hiring process saves professionals time and money.

Entrepreneur 111

Entrepreneur Revenue Viral Networking 111

K9 Ventures

OCTOBER 10, 2017

I’ve been an avid reader of Dan’s Term Sheet while he was at Fortune , and now Pro Rata at Axios. Unless every aspect of product development is covered by founders who are only receiving equity, there are other parts of building a product that will require hiring highly qualified people.

Seed Stage 82

Seed Stage Finance Later Stage Equity 82

Seeing Both Sides

JULY 15, 2009

Year in, year out, Thus, VCs and entrepreneurs are not operating on an equal playing field when it comes to negotiating financings and interpreting the impact of the terms involved. Another term that impacts the price is the size of the option pool. I was competing with another firm.

Pre-Money Valuation 49

Pre-Money Valuation Option Pool Stock Options Post-Money Valuation 49

Startup Lessons Learned

MAY 31, 2019

Scott Kupor is the managing partner at Andreessen Horowitz, where he’s responsible for all operational aspects of running the firm. Coming from an operating role in a company, that can feel odd - that doing nothing is in fact accomplishing your objective - so that takes some getting used to.

Lean 108

Lean Venture Capital Conversion IPO 108

David Teten

DECEMBER 3, 2019

I walk through below how progressive investors are using technology and analytics throughout all of their operations. We are also seeing technology evaluation as an increasingly important part of LP operational due diligence. ff Venture Capital hired two full-time engineers to build out Totem. 1) Manage the firm .

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Startup Lessons Learned

AUGUST 17, 2020

And then we also looked at our operations and said, "We have a footprint across the US that can produce and distribute millions of meals every week, fresh meals to 400 cities and towns at incredibly affordable prices given the way we have cost optimized our footprint and our program." Kirsten Saenz Tobey : So we started the company in 2006.

Cofounder 60

Cofounder Security Founder Entrepreneur 60

abovethecrowd.com

APRIL 20, 2016

Also, they have a strong belief that any sign of weakness (such as a down round) will have a catastrophic impact on their culture, hiring process, and ability to retain employees. The Sharks Arrive With Dirty Term Sheets. The typical Silicon Valley term sheet does not include such terms. Who are the Sharks?

IPO 40

IPO Term Sheet Silicon Valley Valuation 40

Austin Startup

MAY 19, 2018

Just don’t do reference checks ever until the term sheet has been issued and you’re almost ready to fund. Most of the time we are being told no by somebody whether it’s prospects, investors, or hires who aren’t willing to take the risk at a startup. Founders are operating at hyper speed. Get excited (and show it!)

Founder 75

Founder Early Stage Software Review Deal Flow 75

Eric Friedman

AUGUST 18, 2021

From who we hire to the way we go to market, from how we engage with our limited partners to how we engage with founders, it’s all about being very focused on quality and consistency so as to affect strategies to generate meaningful carry for ourselves and our limited partners. On Deciens’ Lean Operation. You have to pick one.

Silicon Valley 88

Silicon Valley Venture Capital Cofounder Africa 88

Steve Blank

FEBRUARY 26, 2020

For example, not all revenue is recurring and even in a subscription model for a consumer goods company, your recurring revenue will not be valued the same as if you’re selling enterprise software and operating costs are so vastly different. That means you need metrics that prove you have it.

Cofounder 431

Cofounder Seed Stage Valuation Metrics 431

www.paulgraham.com

APRIL 28, 2010

A company that needed to build a factory or hire 50people obviously needed to raise a certain minimum amount. At Viaweb we were forced to operate like a consulting companyinitially, because we were so desperate for users that wed offerto build merchants sites for them if theyd sign up. How likely are they to offer you a term sheet?What

Bootstrapping 77

Bootstrapping Term Sheet Founder Startup 77